Friday, January 27, 2012

Generation Subsidy Domino Falls in Spain:

What is today an energy problem could become a
financial problem,” Industry Minister Jose Manuel Soria said in Madrid.
The government passed a decree today stopping subsidies for new wind,
solar, co-generation or waste incineration plants. The system’s debts were racked up as revenue from
state- controlled prices failed to cover the cost of delivering power.
Costs have swollen in the past five years because of an increase in
regulated payments for the power grid, support for Spanish coal mines
and subsidies for renewable energy plants.

This should alert a couple more people in Ontario to the issues.
Contracts are liabilities, and liabilites grow as contracted capacity does ... but so to do capacity payments to keep coal and gas available to support intermittents.

The report today noted, "Generating capacity is about twice Spain’s peak demand following a boom
in investment in solar panel installations and combined-cycle gas-fired
plants," and Ontario is following a similar trajectory. Removing 10000MW of baseload (actually 11000MW nuclear and another 2000-2500MW of hydro that runs constantly), that leaves peak at another 15000 MW for which we have planned 30000MW of capacity (1 renewable Watt is matched by 1 reliable Watt)